Risk Aversion Returns To Marketplace Amid New North Korea Threats

(Kitco News) – World equity markets were mostly weaker overnight as risk aversion has quickly returned to the marketplace ahead of the weekend. North Korea has threatened to detonate a huge hydrogen bomb over the Pacific Ocean.

"Rocketman" Kim Jong Un has vowed to use "hard-line countermeasures" in response to President Trump's threat earlier this week to destroy North Korea. U.S. stock indexes are also pointed toward weaker openings when the New York day session begins.

Gold prices are showing modest gains on renewed safe-haven demand, some bargain hunting from recent losses, and on short covering in the futures market. Silver prices are also slightly up, following gold.

In other overnight news, the Euro zone Markit composite purchasing managers' index (PMI) rose to 56.7 in September from 55.7 in August. A reading of 55.6 was expected. A number above 50.0 suggests growth in the sector.

The key outside markets on Friday morning see the U.S. dollar index lower.

Most of Wednesday's strong gains have now been given back. Greenback bears have the solid near-term technical advantage. Meantime, Nymex crude oil futures are near steady this morning. The oil bulls have the slight near-term technical advantage as prices hover above $50 a barrel.

U.S. economic data due for release Friday includes the flash services PMI and the flash manufacturing PMI.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow Jim Wyckoff @jimwyckoff for breaking news.